BSP Circular 1221: Expanded Regulatory Relief for Calamity-Affected Banks

BSP Circular No. 1221 (Series of 2025) updates the regulatory relief policy under Section 1151 of the MORB, expanding the relief package for banks affected by calamities. The guidance clarifies eligibility, timing, borrower relief measures, and supervisory reporting expectations so banks can maintain services and stabilize affected portfolios.

Key Changes

Expanded relief package to support banks and affected borrowers during calamities, aligned with operational resilience and business continuity objectives.
Clearer definitions for hazards, state of calamity, affected areas, and inception date for calamity-related relief.
Defined availment period: banks have one year from the inception date of the calamity to notify BSP and avail relief measures.
Defined relief period: most relief measures apply for one year from the inception date, unless otherwise specified.
Broader borrower relief including grace periods, deferments for agricultural loans, and restructuring support.
Temporary exclusions from past due and non-performing loan ratio calculations for affected borrower accounts.
Operational flexibilities on notifications, branch closures, and banking hours during calamities.
Expanded reporting and notification requirements for availing relief measures and post-relief action plans.
Temporary currency withdrawal arrangement for banks not yet enrolled in the currency management system.

Who Is Affected

Banks with head offices, branches, branch-lite units, or customers/borrowers in areas declared under a state of calamity.
Borrowers and employees adversely impacted by calamities in declared affected areas.
Banks extending agricultural loans and other credits to affected borrowers.
Banks availing staggered booking of allowance for credit losses or impairment losses.

Effective Date & Transition

The circular takes effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation. Relief measures run from the inception date of the calamity, with specific time windows per relief type.

Compliance Actions Checklist

Confirm eligibility based on affected areas and the location of borrower operations or residence.
Document the inception date using official advisories (NDRRMC/RDRRMC/LDRRMC, PAGASA, PHIVOLCS, or other relevant agencies).
Observe the one-year availment window for notifying BSP of relief measures.
Apply borrower relief options where appropriate:
- Grace period up to six months for current loans as of the calamity inception date.
- Deferment for agricultural loans, aligned with production cycles, typically six to twelve months.
- Extended deferments for agriculture, fisheries, or livestock based on documented impact.
Avoid interest-on-interest, penalties, or fees during grace or deferment periods.
Use allowed exclusions from past due and NPL ratios for affected loans, and maintain records of excluded accounts for supervisory reporting.
Submit required BSP notifications, including:
- Letter/email from the bank president or equivalent officer.
- Board resolution authorizing the relief package.
- State of calamity declaration documents.
- Supporting documents for staggered booking or impairment losses, if applicable.
Prepare post-relief action plans within 30 calendar days after one year from the calamity inception date, covering compliance status and risk mitigation steps.

Relief Package Highlights

Borrower-focused relief

Temporary grace period (up to six months) for affected borrowers.
Deferment of agricultural loans, with repayment terms adjusted to crop cycles.
Waiver of BSP documentary requirements for restructuring of loans under covered relief items.

Supervisory ratio relief

Temporary exclusion of affected loans from past due and non-performing loan ratios for one year, with possible extension for agricultural loans aligned with deferment periods.
Continued reporting of actual past due/NPLs in prudential reports, while adjusted ratios are used for supervisory purposes.

Operational and reporting flexibilities

Relaxation of notification requirements for changes in banking days and hours.
Relaxed rules for temporary closure of branches and branch-lite units, with consolidated list submission within five days of the calamity inception date.
Deferment of deadlines for opening approved branches/branch-lite units in affected areas.
Waiver of monetary penalties for delayed submission of supervisory reports tied to calamity impacts.

Capital and asset relief

Staggered booking of allowance for credit losses, subject to BSP approval, over up to three years.
Staggered booking of impairment losses on physical assets over up to three years.
Moratorium on monthly payments for banks under rehabilitation, for six months from the calamity inception date.

Rediscounting relief

Grace period for settlement of rediscounting obligations.
Restructuring of rediscounted loans on a case-by-case basis.
Relaxed eligibility requirements for rediscounting line renewal and availment.

Customer identification relaxation

Temporary relaxation of ID requirements for transactions (excluding account opening), subject to limits and monitoring conditions.

Temporary currency withdrawal measure

Banks not yet registered with PhilPaSS and/or not enrolled in the currency management system may withdraw currency directly from BSP ROBS under a temporary arrangement, subject to documentation and notification requirements.

FAQs

How long can banks avail the relief package? Banks have one year from the inception date of the calamity to notify BSP and avail relief measures.

Does the grace period apply to all loans? It applies to loans classified as current prior to the calamity’s inception date, covering principal and/or interest payments due on or after the inception date.

Are banks required to report actual NPLs even with exclusions? Yes. Actual past due and non-performing loans must still be reported in prudential reports, while adjusted ratios may be used for supervisory purposes during the relief period.

Are ID requirements fully waived? No. ID requirements are relaxed temporarily for transactions (excluding account opening) and are subject to transaction caps and monitoring conditions.